tiprankstipranks
Trending News
More News >
Northwest Natural Gas (NWN)
:NWN
Advertisement

Northwest Gas (NWN) AI Stock Analysis

Compare
341 Followers

Top Page

NWN

Northwest Gas

(NYSE:NWN)

Rating:71Outperform
Price Target:
$45.00
â–²(13.98% Upside)
NWN's overall score reflects solid financial performance with strong earnings growth and strategic acquisitions. While technical indicators are neutral, the stock's valuation and high dividend yield are attractive. Positive sentiment from recent earnings and corporate events further supports NWN's potential for sustained growth.
Positive Factors
Acquisitions
NWN completed the acquisition of SiEnergy, which increased revenue more than expected.
Customer Growth
NWN's natural gas customer growth in Oregon and Washington was higher than forecasted.
Negative Factors
Debt
NWN's debt-to-capital ratio increased to 61.3%, up from 57.6% in the prior quarter.
Earnings Per Share
The analyst maintains a Hold rating due to expected future dilution, which may lead to lower EPS growth in coming years.

Northwest Gas (NWN) vs. SPDR S&P 500 ETF (SPY)

Northwest Gas Business Overview & Revenue Model

Company DescriptionNorthwest Gas (NWN) is a leading provider of natural gas services, operating primarily in the Pacific Northwest region of the United States. The company focuses on the distribution and supply of natural gas to residential, commercial, and industrial customers. With a commitment to safety, reliability, and sustainability, NWN aims to deliver efficient energy solutions while supporting community growth and environmental stewardship.
How the Company Makes MoneyNorthwest Gas generates revenue primarily through the sale and distribution of natural gas to its customer base, which includes residential, commercial, and industrial users. The company charges customers based on the volume of natural gas consumed, typically measured in therms, and adjusts pricing according to market rates and regulatory guidelines. In addition to direct sales, NWN may also benefit from infrastructure investments, such as pipeline expansions or upgrades, which can enhance service reliability and attract new customers. The company may form strategic partnerships with other energy providers or technology firms to leverage advancements in energy efficiency or renewable energy integration, potentially creating additional revenue streams. Regulatory frameworks and state energy policies also play a significant role in shaping Northwest Gas's pricing and revenue strategies.

Northwest Gas Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: -1.79%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong earnings growth, significant utility customer growth, successful settlement in the Oregon rate case, and robust performance in the renewables segment. However, higher expenses and interest costs were noted as challenges. The positive developments and growth projections suggest a favorable outlook.
Q2-2025 Updates
Positive Updates
Strong Earnings Growth
Reported adjusted net income of $2.28 per share for the first six months of 2025, compared to $1.60 per share for the same period last year.
Significant Utility Customer Growth
Combined utility customer growth rate was 10.6% for the 12 months ended June 30, 2025, driven by gas utilities in Texas.
Successful Settlement in Oregon Rate Case
Settlement resolving Northwest Natural's revenue requirement components resulted in a $21.3 million revenue requirement increase.
SiEnergy Growth and Expansion
SiEnergy posted a sizable increase in customer backlog with signed contracts for over 217,000 future meters, and integration of Pines Holdings added approximately 7,000 connections.
Renewables Segment Performance
Renewable natural gas projects met production expectations, providing solid earnings and cash flows with no meaningful exposure to RIN or LCFS markets.
Negative Updates
Increased Expenses
Higher operations and maintenance costs, depreciation, and interest expense partially offset earnings growth.
Higher Interest Expense Impact
Adjusted net loss from other businesses increased by $4.2 million due to higher interest expense at the holding company.
Company Guidance
During the Northwest Natural Holdings Company Second Quarter 2025 Earnings Call, the company reaffirmed its annual 2025 adjusted earnings guidance, projecting earnings per share (EPS) between $2.75 and $2.95. The company reported a strong first half of 2025, with adjusted net income of $2.28 per share compared to $1.60 per share in the same period of 2024, driven by a 10.6% growth in utility customers, particularly in the gas utilities in Texas. The Oregon general rate case settlement included a revenue requirement increase of $21.3 million and an ROE adjustment to 9.5%. SiEnergy, a Texas-based utility, added approximately 83,000 customers and has a large backlog of 217,000 future meters. Northwest Natural Water saw a 5.8% customer base growth. Capital expenditures for 2025 are expected to range from $450 million to $500 million, with no significant debt maturities anticipated. The company maintains a long-term EPS growth rate expectation of 4% to 6%.

Northwest Gas Financial Statement Overview

Summary
NWN exhibits steady revenue growth and sound operational efficiency, supported by solid margins. The balance sheet shows sustainable leverage levels, although reliant on debt. Cash flow performance highlights strong cash generation but is overshadowed by negative free cash flow. Overall, NWN maintains a stable financial position with areas for improvement in cash management.
Income Statement
75
Positive
NWN shows a consistent revenue growth trajectory with the latest TTM revenue growth of 5.3%. The gross profit margin has improved to 45.1% TTM, reflecting enhanced cost management. However, net profit margin remains moderate at 8.5% TTM. EBIT and EBITDA margins are healthy at 19.4% and 33.5% TTM, respectively, indicating stable operational efficiency.
Balance Sheet
70
Positive
The debt-to-equity ratio stands at 1.64, indicating a moderate level of leverage. Return on equity is solid at 7.1% TTM, suggesting effective utilization of shareholder funds, while the equity ratio is 25.5%, which is typical for the industry. The balance sheet reflects a stable financial position, though with a reliance on debt financing.
Cash Flow
65
Positive
Operating cash flow to net income ratio is robust at 2.48 TTM, demonstrating strong cash conversion. However, free cash flow remains negative, posing a concern for liquidity. The negative free cash flow growth rate of -17.8% from the previous period raises caution on capital expenditure management and cash reserves.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.24B1.15B1.20B1.04B860.40M773.68M
Gross Profit491.89M397.61M423.87M341.23M329.12M300.50M
EBITDA381.96M348.09M344.49M303.37M264.09M238.09M
Net Income103.25M78.87M93.87M86.30M78.67M76.78M
Balance Sheet
Total Assets5.79B5.23B4.87B4.75B4.06B3.76B
Cash, Cash Equivalents and Short-Term Investments102.58M38.49M32.92M29.27M18.56M30.17M
Total Debt2.32B1.96B1.75B1.68B1.52B1.34B
Total Liabilities4.33B3.85B3.58B3.57B3.13B2.87B
Stockholders Equity1.46B1.39B1.28B1.18B935.15M888.73M
Cash Flow
Free Cash Flow-182.16M-194.12M-47.40M-191.69M-134.90M-137.87M
Operating Cash Flow235.98M200.28M279.95M147.67M160.35M143.02M
Investing Cash Flow-784.43M-428.99M-335.50M-435.46M-300.12M-294.28M
Financing Cash Flow574.08M227.06M64.21M301.63M131.44M171.78M

Northwest Gas Technical Analysis

Technical Analysis Sentiment
Negative
Last Price39.48
Price Trends
50DMA
40.21
Negative
100DMA
40.77
Negative
200DMA
40.11
Negative
Market Momentum
MACD
-0.17
Positive
RSI
39.86
Neutral
STOCH
11.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWN, the sentiment is Negative. The current price of 39.48 is below the 20-day moving average (MA) of 40.73, below the 50-day MA of 40.21, and below the 200-day MA of 40.11, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 39.86 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NWN.

Northwest Gas Risk Analysis

Northwest Gas disclosed 35 risk factors in its most recent earnings report. Northwest Gas reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Northwest Gas Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$4.68B11.4018.03%3.93%20.30%63.69%
76
Outperform
$2.80B22.189.04%2.17%20.41%13.64%
75
Outperform
$4.44B16.258.37%4.19%-7.10%2.54%
71
Outperform
$1.59B15.607.36%4.91%3.88%11.80%
68
Neutral
$4.35B17.338.24%3.66%13.43%6.49%
65
Neutral
$5.72B25.515.41%3.19%-10.07%5.98%
63
Neutral
HK$29.34B8.545.80%4.90%-3.44%2.46%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NWN
Northwest Gas
39.48
3.01
8.25%
CPK
Chesapeake Utilities
119.85
8.33
7.47%
SR
Spire
75.91
14.44
23.49%
NJR
New Jersey Resources
46.66
3.87
9.04%
SWX
Southwest Gas
79.56
10.48
15.17%
OGS
ONE Gas
72.64
7.38
11.31%

Northwest Gas Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Northwest Gas Modernizes Governance with Bylaw Amendments
Positive
Jul 25, 2025

On July 23, 2025, Northwest Natural Holding Company approved significant amendments to its bylaws. These changes include updates to procedural and disclosure requirements for shareholder meetings, extending notice periods, revising proposal submission deadlines, and permitting electronic communications. These amendments aim to modernize and simplify governance processes, potentially enhancing shareholder engagement and operational efficiency.

The most recent analyst rating on (NWN) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Northwest Gas stock, see the NWN Stock Forecast page.

Executive/Board Changes
Northwest Gas Appoints New Board Directors
Positive
Jul 3, 2025

On July 3, 2025, Northwest Natural Holding Company announced the appointment of Peter J. Bragdon to its Board of Directors and the Board of its subsidiary, Northwest Natural Gas Company, effective July 12, 2025. Bragdon, who has extensive leadership experience at Columbia Sportswear Company, will serve as an independent director. Additionally, Dave Drinkward, President and CEO of Hoffman Construction Company, was appointed as an independent director to the NW Natural Board effective June 30, 2025. These appointments are expected to bring valuable insights and leadership to NW Natural as it continues to grow, aligning with the company’s core values and commitment to the Pacific Northwest community.

The most recent analyst rating on (NWN) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Northwest Gas stock, see the NWN Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Northwest Gas Awaits Approval for Revenue Increase
Neutral
Jun 24, 2025

On December 30, 2024, NW Natural filed a request for a general rate case with the Public Utility Commission of Oregon, seeking a $59.4 million annual revenue increase. By June 23, 2025, a stipulation was filed with the OPUC, proposing a $21.3 million revenue increase, which includes $4.8 million for depreciation, pending completion of capital projects. The stipulation, not opposed by key environmental groups, awaits OPUC approval, with new rates expected by October 31, 2025.

The most recent analyst rating on (NWN) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Northwest Gas stock, see the NWN Stock Forecast page.

M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Northwest Gas Reports Strong Q1 2025 Financial Results
Positive
May 6, 2025

On May 6, 2025, NW Natural Holdings reported strong financial results for the first quarter of 2025, with earnings per share increasing to $2.18 from $1.69 in the same period of 2024. The company completed the acquisition of SiEnergy, a Texas-based gas utility, in January 2025 and signed an agreement to acquire Hughes Gas Resources, further expanding its Texas operations. NW Natural Holdings reaffirmed its 2025 adjusted EPS guidance and long-term growth targets, highlighting its strategic focus on expanding utility services and maintaining shareholder value. The company also declared a quarterly dividend, emphasizing its commitment to returning value to shareholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 26, 2025